71-Year-Old Digital Artist Scammed $1,900 in NFT Fraud

A dubious website, NFT promises, and cryptocurrency payments formed the basis of a scam that led a 71-year-old East Bengaluru digital artist to pay about Rs 1.58 lakh for a non-existent sale. The victim, an experienced CA, had his paintings listed on the fraudulent NFTTradeplace.com, where he was offered a high price in Ethereum cryptocurrency for his artwork. Despite completing the alleged sale, the victim's withdrawal was blocked by a "delay fee," leading to multiple payments being extracted under various pretexts.

Cybercriminals Exploit Non-Fungible Tokens to Scam 71-Year-Old Digital Artist

In a brazen act of virtual deception, a 71-year-old digital artist in East Bengaluru fell victim to a sophisticated scam involving a dubious website, non-fungible tokens (NFTs), and cryptocurrency payments, leaving him conned of approximately Rs 1.58 lakh (USD $1,900).

The victim, Shivaprasad R (name changed), a practicing chartered accountant (CA), had taken up digital art during the COVID-19 pandemic and had showcased his creations in several exhibitions in Bengaluru. His artwork was also uploaded on his Facebook and Instagram accounts.

In October 2023, a malicious individual posing as an NFT art dealer on Facebook lured Shivaprasad to www.nfttradeplace.com, a fraudulent marketplace for NFTs. NFTs are unique digital certificates of ownership for assets such as art, music, and videos, stored on a secure blockchain ledger. Unlike cryptocurrencies, NFTs are distinct and cannot be exchanged on a like-for-like basis.

The scammer contacted Shivaprasad, expressing interest in purchasing his paintings and offering a lucrative price of 42 Ethereum (ETH), a cryptocurrency worth approximately Rs 1.09 crore (USD $130,000) at the time of the complaint filing.

Shivaprasad, unaware of the fraudulent nature of the website and the scammer's intentions, listed four of his paintings for sale. He initiated the transaction by paying 0.115 ETH (equivalent to Rs 21,653.72) as "Gas Fee" or transaction fee.

After the supposed sale was completed, Shivaprasad requested to withdraw 6 ETH from his account. However, his withdrawal was met with a demand for a "delay fee" due to his reluctance to initiate the withdrawal immediately.

Concerned and desperate to secure his earnings, Shivaprasad made multiple subsequent payments to various bank accounts and via UPI transfers as instructed by the scammers. The payments totaled Rs 1.58 lakh, including two installments of Rs 25,000 each on February 5th, Rs 22,000 on February 6th, and Rs 50,000 on February 9th. The final payment of Rs 15,000 was made on March 15th.

Despite fulfilling the scammers' demands, Shivaprasad's withdrawal request remained unanswered, with the website demanding further payments. Shivaprasad's request to deduct the delay fees from the sale amount and remit the balance was ignored.

Realizing the fraud, Shivaprasad approached the cyber police on April 17th, who registered a case under Sections 66C (identity theft) and 66D (cheating by impersonation) of the Information Technology (IT) Act, and Section 420 (cheating) of the Indian Penal Code (IPC).

The police investigation has revealed several red flags, including the requirement for the victim to pay additional fees in the form of a delay fee after the sale was supposedly completed. The police are currently pursuing leads based on bank account and domain registration details.

This incident highlights the growing sophistication of cybercriminals and their exploitation of emerging technologies to target unsuspecting individuals. It serves as a cautionary tale for all online users to exercise vigilance when engaging in digital transactions and to be wary of any suspicious websites or individuals offering unsolicited investment opportunities or art purchases.